Wall Street is stunned! Daly's surprise declaration: Two rate cuts this year is the bottom line! Cryptocurrency will sweep traditional finance, the first shot has been fired!

"The policy shift is already on the horizon, and the crypto market may welcome a policy honeymoon period!"

Federal Reserve bigwig Daly has spoken out, saying that a rate cut this year is basically secured, and she personally feels that cutting twice is more appropriate.

Why say it now? Because recent economic data has been somewhat 'divided': consumers are not spending as vigorously as expected, but factory prices have unexpectedly risen. At the same time, the job market is cooling, and the overall economy is slowing down.

Daly's dilemma: Inflation is still a bit high, but on the other hand, the job market is weakening. She is worried that if they focus solely on tackling inflation and wait too long to cut rates, it could collapse the job market—she doesn't want to make that mistake!

"Act when it's time to act!" She clearly stated that the earliest they might start cutting rates is in September. Although the final number of cuts will depend on subsequent data, she personally predicts that "two cuts" is a reliable benchmark.

Mig's personal opinion:

Increased certainty is a positive! Daly is a core voting member of the Federal Reserve, and her prediction of "two rate cuts" is much stronger than the previous vague "might cut this year"! This has given the market a sense of reassurance. Liquidity easing expectations are the oxygen for the crypto market!

Focus on employment data! Daly repeatedly emphasizes, "I do not want to sacrifice the job market," which means that future non-farm payroll reports and unemployment rate data will be more critical than CPI inflation data. If employment data continues to weaken, the Fed's rate cuts may come more significantly and quickly, which would be more beneficial for risk assets.

The "soft landing" narrative supports the market. The Fed is currently walking a tightrope, aiming for moderate economic slowdown + controlled inflation. If the "soft landing" is successful, it will create a golden environment for risk assets such as cryptocurrencies.

Short-term volatility is inevitable, but the trend is upward. Occasional fluctuations in inflation data may trigger market tension, causing pullbacks. However, as long as the overarching trend of cooling employment and slowing economic growth remains unchanged, the direction of policy easing is difficult to reverse. Pullbacks may even present opportunities—don't be scared off by short-term noise.

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